The European Securities and Markets Authority has appointed Etrading Software Netherlands as the official Consolidated Tape Provider for over-the-counter derivatives across the EU. This marks a significant step in European financial market infrastructure, creating a centralized data stream for OTC derivatives trading activity that has historically been fragmented across venues and jurisdictions.
The selection affects all market participants trading OTC derivatives in the European Union, including banks, brokers, asset managers, and proprietary trading firms who will now have access to consolidated trade data through a single provider. This infrastructure change aims to improve price transparency and market surveillance capabilities for regulators while potentially leveling the playing field for smaller institutions that previously lacked comprehensive market data access.
The consolidated tape will create new compliance obligations for reporting entities and may alter trading behavior as previously opaque pricing becomes more visible across the OTC derivatives market.
FXnCO Insight
Firms active in EU OTC derivatives should immediately assess how consolidated tape data access can enhance their pricing models and prepare for increased price competition as market transparency rises.
Source: Finextra